Monday 30 April 2012

Property Investment Opportunities in College Towns


One sector of the country's real estate market that will likely never endure a substantial slump is student housing. Millions of young adults head off to college for the first time each fall---many of whom choose to reside in off-campus rental properties instead of dorms.

Due to this consistently high demand for apartments in college towns among the 18-22 crowd, many property investors know just how lucrative properties in these communities can be.

"Demand and supply conditions for housing are bad," Fiserv chief economist David Stiff told MarketWatch last year. "But in college towns demand conditions are slightly better. There's a stable source of new demand every year."

Buying College Town Real Estate
According to Inman News, obtaining a property in an area with numerous colleges and universities is a very attractive proposition for many investors.

With property values low in a number of real estate markets nationwide---both big and small---that have numerous undergraduates renting or looking to rent, investors would be wise to perform due diligence and investigate the pros and cons of putting down their money on college-town residences, the source states.

Inman News notes many people investing in these properties aren't just major development firms building new properties or hot-shot investors with dozens of residences in their name. Instead, a number of these rental property buyers are new to the world of real estate investment, and are only looking to secure a few properties to create modest revenues by leasing them out to college students.

A report by MSNBC states housing investors searching for properties in college towns should do their research and ensure they know what they're getting into, though. While prices, neighborhood and community safety and an area's school enrollment figures should play a role in an investment decision, the source states location to nearby schools is the most important factor to take into consideration when contemplating a real estate investment.

Hot Student Housing Markets in 2011
Nearly every one of the major U.S. markets can be considered college towns, or at the very least, have a number of smaller college towns around them. Some markets, though, have proven to be the marquee spots for investors to put down some capital and secure properties, a survey by a real estate information website indicates.

With substantial average rental rates, stable property values and an always-high demand for apartments in a college-rich community, including notable schools Harvard and MIT, Boston topped Move.com's recent list of the best college towns for prospective property owners to invest in. The list was based on a report of American cities with the best schools from U.S. News and World Report.

The nation's capital also ranked highly on the website's list. Washington, D.C.'s property values are some of the highest in the nation, and the district is one housing market that has remained strong throughout the housing crisis. With substantially populated colleges and universities in D.C., including Georgetown and George Washington, renting in the area continues to go through the roof. Additionally, affordable median list prices for properties in metros with many schools, including Nashville, Chicago and Houston, makes them viable candidates for real estate investment, according to the survey.

"Local markets with universities or colleges can be an attractive option for many local real estate investors," Move chief executive officer Steve Berkowitz said regarding the survey results. "Housing demand in college towns is generally high and vacancy rates are usually low. Combine the supply and demand ratio with rising admissions and the five percent rise in rental rates expected by the end of the year, and rental property in college towns can be a smart option for the right investor."

Refinancing apartment to buy third property



Our property investment consultant Peter Yee is the author of the books, You Can Become Rich in Property and The Certain Way to Life’s Riches.

Formerly an educationist, he has also been a management consultant, stockbroker, restaurant owner, property investor and investment coach.

Yee has a doctorate and master’s degree in business administration as well as a bachelor of science degree. He runs workshops on How to Make Money from Residential, Commercial and Auction Property in Malaysia.


Question
I have one serviced apartment with a market value of about RM500,000 and a rental income of RM2,000. My loan is RM339,000 with a monthly repayment of RM1,200
.
A year ago, I bought another apartment for my own use. But I was transferred to Pahang and I'm renting a house there. My second apartment was rented out for RM1,100 and I’m paying RM750 monthly for the loan. I will return to Kuala Lumpur next year and I plan to buy another house.

The current banking policy is that I can't get 90% loan for my third property. I'll only get 70% and I have to come up with 30% down payment, which is quite difficult for me. I have three options.
  • Stay at my old apartment which is about 30km from my new workplace and lose my positive cash flow.
  • Rent a new house near my workplace. Positive cash flow will go to apartment rent.
  • Buy a new apartment by refinancing my serviced apartment. Since it is still new - completed in Oct last year - refinancing it will increase my monthly payment to RM2,000 per month. This means no positive cash flow for that serviced apartment.
What is your opinion on this matter.
Ramzul, Pahang

Answer
Congratulations on your success of getting positive cash flow!

Property investment is getting more challenging partly due to the 70% loan limit for the third residential property. Such a loan consideration is now based on the net household income instead of gross household income. The challenge is also partly due to the inflated prices of property in general.
The pricing and rental rates of condominium developments and office space in areas with an oversupply such as KLCC have been declining since the second half of 2011.
Your question relates to the future or about one year from now. Many things can change within one year and the future is uncertain. 

The general election is around the corner. Other considerations which may affect sentiments include the debt crisis in Europe, the US economic crisis tail off, stagnation of the Japanese economy, soft or hard landing of China's economy and a slower GDP growth (an estimate of 4.8%) in Malaysia this year.

Property prices in cities and major towns in China, Hong Kong and Singapore are beginning to decline. The pricing and rental rates of condominium developments and office space in areas with an oversupply such as KLCC and Mont’ Kiara have been declining since the second half of 2011.

The reason for the 70% loan limit is to reduce the increasing household debt to service ratios (expected to be more than 60% in 2012). The 70% loan limit may change within a year, so do not worry too much for now. Be flexible and adjust your investment plan, as and when, the changes occur.
If you plan to purchase another house or a third residential property, here are other factors to consider before making a decision.

In considering your second option, renting a new house near your workplace and using the cash flow from your apartment rental to pay for it, is a good idea. This is because you don't have to evict the existing tenant and it will help you save time and petrol.

For your third option, in refinancing your serviced apartment for the third loan – check with your banker for the maximum loan amount eligible – as the serviced apartment is sited on commercial land with a residential building on it. At the same time, consider the hidden costs such as maintenance fees, quit rent, assessment rates and rental vacancy rate.

I do hope the 70% third residential loan limit will be removed and you can continue your investment plan next year.

Peter


Sunday 29 April 2012

Tips for first time housebuyers



BUYING a house will most likely be the biggest single investment in a person's life. But for first-time buyers, going about purchasing a home can be a procedural nightmare, especially without the proper planning or guidance.

The following are some simple tips for first-time buyers to consider before ploughing their money into their “dream home.”

Weighing your options

The first thing to do is to determine what exactly you are looking for.

“Visit a few property showrooms and also attend a few launched to see what's available in the market. If you're a first-time buyer, you're probably looking for something below half-a-million ringgit,” says VPC Alliance (Malaysia) Sdn Bhd director James Wong.

Also, determine if you're looking for landed property or an apartment.

“You need to weigh your options. An apartments comes with additional running costs, such as service charges - it's part of a communal thing,” Wong points out.

“If you stay on landed property, the advantage is that there is no service charge. Furthermore, you may also have access to a garden of your own,” he adds.

Malaysian Institute of Estate Agents president Nixon Paul concurs that there are certain advantages to owning landed property.

“Landed property would make a better buy as you have control over your own house. With an apartment, the biggest consideration is the management running it. If there is no effective management, it could really go downhill,” he says.

Location

With land getting increasingly scarce, more so within the Klang Valley area, affordability can be an issue. “With land getting more expensive, the chances of getting landed property below RM500,000 close to the city is slim,” says Wong.

He adds that a person's distance from work should be factor to consider when buying property.

“You need to determine what is the commuting time to and from work that you can tolerate everyday,” he says.

Nixon however believes that it's still possible to find property below RM500,000 within the Klang Valley.

“They're available but you just need to look harder. You can find apartments within this price range in places like Kepong, Selayang and Puchong. You just have to go out further (from the city),” he says.

A viable option, says Wong, is to purchase property that will be located “not very far” from the proposed stations that will be built for the light rail transit (LRT) Ampang and Kelana Jaya line-extension and Mass Rapid Transit (MRT) projects.

“Once these lines are up, there will be improved connectivity within the Klang Valley.”

He adds that property along the proposed lines won't necessarily be expensive.

“The lines also go through the outskirts of the city and it would be good to study where the stations will be. If you live within 10-minutes driving distance of the stations, it won't be a problem.”

Wong says a mistake in the past was that there weren't sufficient parking facilities for the LRT lines.

“But I was informed that the future lines will also have parking facilities,” says Wong.

Another way for new housebuyers to around the issue of affordability is to try and apply for the My First Home Scheme.

Launched in March last year, the scheme allows young working adults obtain 100% financing from banking institutions to purchase their first home valued at a maximum of RM220,000 (for single applicants) or a maximum of RM400,000 (for joint applicants of husband and wife with household income below RM6,000 per month cumulatively).

Applications are made to participating banking institutions and upon approval, Cagamas - a national mortgage corporation - would provide a guarantee for the first 10% of the loan.

“It is a good move by the Government to promote home ownership,” says Wong. However, he notes that properties launched under the scheme are not located within the city.

“There were launches in Negri Sembilan and the Puchong area. However, if your workplace is within 5km of these homes, then why not,” he adds.

Inspect the property

If the property you're buying is physically present (such as secondary property), it's best to inspect it to ensure there are no shortcomings or flaws that will incur you additional unwanted costs.

“A house might look beautiful in pictures or from the outside, but you never know for sure until you take a closer look at it yourself,” says property investor Kamarul Ariff.

“It's best to inspect the house inside-out, floor to ceiling. Check to see if the walls and fixtures are in good condition, or if the house is infected with white ants, for instance. Bring along a friend who's a better judge of things like this, as it'll save you a lot of unnecessary cost in the future.

“Also, it doesn't hurt to inspect the property on a rainy day - a good way to find out if you've got leaks!”

Sorting out your finances

A major factor in the home-buying process is the issue of financing. Of course, one needs to have the financial resources first before going house-hunting.

Noteworthy is that effective January 1, Bank Negara has implemented its responsible lending guidelines, whereby loans are now approved based on net income compared with gross income previously.

The new guidelines are intended to help manage the household debt in Malaysia to reasonable levels.

“Currently, banks are tightening on housing loans and potential property buyers may not be able to secure up to 90% financing. Instead, they may only get between 70% and 80%. They now need to have as much as 20% cash or equity, unless its a gift or a loan from your parents,” says Wong.

But Nixon believes that securing a loan is not a problem, especially for young property buyers inspite of the new loan rules.

“From what we've been hearing, it's not the younger generation that's been having problems getting loans, but instead, the older generation.

“This is because the younger generation don't usually have debts - at most it might be a car loan. We find that it's the older generation, those with several ongoing loans or debt that have problems getting their loans approved under the new lending guidelines,” he says.

Bank officer Razlan Hashim says potential property buyers should ensure that their monthly loan payment will not be a burden on their spending. “You need to ensure that the home you're buying is within your means,” he says.

By The Star

Saturday 28 April 2012

Be a property millionaire without investing large sums


Property millionaires, Michael Tan, 34, and Juanita Chin, 39, have proven that “you don’t need large sums of capital to invest.” Both of them have achieved financial independence through property investments in just a few short years.

It is rather easy for one’s self-admiration to balloon out of proportion with a burgeoning bank balance, but Michael and Juanita remain firmly grounded and truly believe in paying it forward by sharing their strategies and success stories in their upcoming seminar.

Property millionaires, Michael Tan and Juanita Chin. 
Tell us about your background and how you became involved in property investment. 
Michael Tan (MT): My parents encouraged me to be a professional. You know, the likes of a doctor, engineer. I studied engineering and worked for a couple of years and then ventured into a few businesses. It took the loss of a job, two big failures and one near bankruptcy to realise that making money does not equal to keeping money.
I then decided to pursue property investment. Now, I have 12 properties valued at approximately RM2.9million.

Juanita Chin (JC): I was a bank teller earning RM400 per month. I have no degree and I only finished Form 5. But I had big dreams to be successful despite my lack of education. I first started investing in year 2003 because I wanted more time with my children. Working for long hours wasn’t getting our family anywhere. My husband, Ignatius, and I wanted a better life and not be stuck in the rat race.
After attending two life-changing seminars, we took action within a month. To date, we have 13 properties valued at RM5.6million. We now have the freedom of time, and my husband is able to pursue his passion in options trading.

How did you get to know each other? 
MT: I attended a seminar that Juanita was co-sharing and spoke with her on the last day of the seminar. I consider her as my sifu (mentor) and I am very inspired by her story. Against all odds, she and Ignatius managed to be financially free.

So, is this the first collaboration between both of you? 
MT: No. The first collaboration was in December 2009, for a charity event. I called Juanita to participate and she readily agreed. The second would be an upcoming seminar on 20th and 21st of March 2010.

Tell us about your first investment. 
JC: We attended a RM57 property preview and learned that we can invest with little money. So we decided to try the strategy and negotiated with a property developer. We signed the SPA (Sales & Purchase Agreement) for RM5,000 for a property in Gurney Drive. The property’s lease was priced at RM450,000 and it has appreciated to approximately RM570,000 to RM580,000.
It is rented for RM3,000, while the monthly installment is RM1,800. Minus the service charge (maintenance fee) of RM200, we get a passive rental income of RM1,000.
MT: Also, mind you, she has four kids.
JC: Yes, it is important to mention that I have four kids. When we started investing, we already had two kids. The worse thing that could happen is losing money, but at least we tried. We then bought two more units on the lower floors at the same block with the same method.
MT: Also, I would like to mention that the units are not prime units or the nicest ones.

Juanita, where are your other properties located? 
JC: All in Penang.

Michael, which was your first investment? 
MT: As a business person, I wanted to do different things. I took a more conservative approach. I paid RM6,000 for a low cost unit and made RM18,000 back. I shared my money-making skills with my staff as well. One of them (at his mortgage broking company) paid RM1,180 as downpayment and she made RM14,000 after three months.
JC: It is possible to start with not much and achieve great success despite limitations. Educate (yourself) and take actions. It is not always a breeze. There are obstacles but it is worth it.
So, it is safe to say that the biggest myth in property investment is that you need large sums of capital. 
JC: Yes, that is the biggest myth.

Juanita, what are these obstacles? 
JC: Some of them include raising cash. We have to convince the banks. If you are determined to reach your objectives, you won’t let it stop you. I live in Penang and travel to Kuala Lumpur very often. Not many people would take the trouble to travel.
MT: Tell them about your furniture shopping trip!
JC: Oh! Ignatius and I would drive all the way from Penang to KL to buy furniture. Pack it all up in our car, tie things to the roof and then drive all the way back, on the same day.
MT: I have known her for only two to three months, but I see her in KL very often. I am blessed to have met and known her.

Wow! Where do you find the energy and drive?
JC: It’s just like a mother loving a child. I don’t mind not resting. As a mother, the saddest thing is not having time for them, (or) providing more for them.

What are the essential traits or qualities to be a successful investor? 
JC: The person must love property. (He/she) Must be literate about real estate or finance.
MT: Financing can be a headache. One must be able to balance financing well enough, to pay loans well. Bear in mind, our properties might be worth millions, but we also have millions in debt.

Juanita has written a book titled “Inspired To Change”. Michael, any plans to follow suit? 
MT: Yes. I am planning to release my book in October this year. Soon… soon, I will start writing.

What are the key things to look out for when investing? 
JC: Be practical. You need to decide on a particular location and who you are targeting. For example, if you are targeting expatriates, then buy (property) in the area where they usually are.
MT: You could identify a fixed area and buy in the same area over and over. For me, I focus on good deals in Kiara only and areas where I can attain a rental yield of 8%.
Some of the strategies include focusing on low and medium cost projects. For those who are younger and do not have much cash, start with that. There is still a demand for such units. Some people prefer commercial, so go with what works for you.

Any advice for aspiring property millionaires? 
MT: Be real. Be yourself. Be grounded.
JC: Believe that it can be done. One of the other things that we hope to impart from the seminar is, “Who are you going to be when you reach your financial goals?” Success is not just about money. We take a holistic approach. We want to get there (be successful) in the right way.
Being rich is about who you have beside you at the end of the day. Surround yourself with good people.

MT: It is fulfilling as a person, to see the changes in people, to see how their lives have improved. I hope to share my knowledge and affect 10 million people. We also do charities from time to time and are currently supporting a home for the underprivileged, House of Joy, in Puchong.

Secrets of buying from property developers



By Sherry Koh | Jul 13, 2010


Juanita Chin is one gutsy lady. Her property investment journey with her husband began in year 2003 and today, they own 13 properties in Penang worth approximately RM5.6 million. 12 of those properties were purchased from developers.

How do these numbers make her gutsy you ask? They don’t, but the following figures do; when she started, she was a bank teller earning RM400 and she had two young children. She had the courage to take action and the story of her journey towards financial freedom is as inspiring as it is heartwarming.

In a recent two-day property investment course titled Breaking the code: Discover the secrets of buying from property developers in Malaysia, Chin partnered with fellow property millionaire and close friend Michael Tan. This is not their first collaboration and certainly, will not be their last.

Even before looking at new residential developments by developers, there are many things that each investor must do and ask oneself.

• Research: Spend 80% of your time on research before placing any deposit. Make sure that the price per square foot and location is right. Chin shared, “There was an expo overseas and most of the buyers bought a property that was in the jungle, with beautiful scenery and all that. But these investors were not aware that the development would be 100km from the nearest town! By asking the right question(s), these investors would not have been stuck with their purchase.”

Energetic: Michael Tan “warming up” the crowd
If one does not conduct the necessary research, one could be stuck with a property that has depreciated from RM100,000 to RM50,000 and be stuck with the property after seven years (and counting!). That is another example that Chin shared. The unfortunate investor told her, “I should’ve invested in seminars. What is a few thousand (to spend on seminars), to save a RM50,000 mistake!”

• Set your goals: You need to know whether you are going purchasing to keep (for rental returns) or flip (buy-to-sell upon capital appreciation). It is also important to figure out who the target tenants or buyers are once the project is completed as that affects your goals. Ask yourself, “Would a restaurant or grocery store want to do business here?”, because future tenants or buyers will ask such questions.

• Set your budget: Decide on your property portfolio, whether it would be less than RM500,000 or RM100,000 and so on. For a newbie, it is advisable to begin with a smaller budget.

• Set your target location: Don’t run all over the place. Instead, be an expert in a particular area and keep farming (investing) in that area.

• Pick type of development: Would it be residential, commercial or industrial?
Once you have figured all that out, then you should analyse the developer. To evaluate, you need to find out these key information - track record, financial strength, reputation, past projects (completed / abandoned), end-financiers, workmanship, license approval and the individuals behind the project.

Chin also cautioned that it is important to find out if a developer has been blacklisted by the Ministry of Housing and Local Development. As reported by The Star on March 23, 2010, a total of 1,345 housing developers were blacklisted from carrying out projects the previous year. As at March 5 this year, a total of 1,120 developers were blacklisted and the highest number of blacklisted developers were from Selangor, followed by Kuala Lumpur and Johor.

To help residential property investors select the right project, Chin shared a list of positive and negative indicators.
Positive indicatorsNegative indicators
WorkmanshipNear sewerage treatment plant
Near amenitiesNext to electricity sub-station
LocationHigh tension wires
Good property managementGraveyards
SecurityT-junctions
Surrounding neighbourhoodFacing empty land
Developer’s track recordGarbage dumpsite
Property layoutSmelly surrounding
SpecificationsNoisy
FacilitiesHigh density
Car park 
Landscape 
Good catchment area 
Growth potential 
The second day – field trip 
On the first half of the day, all participants were ferried to two upcoming residential projects. They had to evaluate these projects based on the first day’s learning and decide which project (of the two) that they would purchase.

The second half of the day was a sharing session with two property investors – Prudence Wong and Nancy Ng, who are of course, property millionaires themselves. In fact, they are so successful that they are currently collaborating on a commercial project in Shah Alam. Both have attended many workshops and courses (property and non-property related) before finding their Midas touch in property investment. They actually met through an Internet course eight years ago.

Passionate about property: Juanita explaning the “property analysis” exercise to
attentive participants



















Read the interview with driven property investor-turned-developer Prudence Wong and find out about her property investment journey and retail-cum-business suite project, Qube.

Nancy Ng is the sales project director for The Qube. She began investing since year 2003 and has attained more than 15 properties within six years. This comical and cheerful Ng shared the following with regards to financing.
• Pay your taxes
• Refinance some of your paid properties or properties that have increased in value
• Be a member of banks’ priority or privilege clubs
• Pay all your loans on time
• Establish good working relationships with your bankers, lawyers and property agents
• Look out for discounts and promotions such as 5/95 (5% down payment / 95% financing from bank), 10/90 or 20/80 from developers
If you are new to property investment, she advised to take baby steps and invest in yourself by attending property seminars (or attend to get the latest updates if you are not a novice investor).

Upcoming workshop – Property Millionaire Challenge 
Juanita Chin will be co-sharing an upcoming seminar with Dr Peter Yee (academician turned property millionaire) and Michael Tan (property investment coach and professional mortgage consultant). The 3-day seminar, titled Property Millionaire Challenge, will be held from August 20 to August 22, Friday to Sunday.

Buying into an elite neighbourhood


S.K. Brothers Realty Sdn Bhd
general manager Chan Ai Cheng.
 
Residential property specialist Chan Ai Cheng cites the increasingly attractive and futuristic residential enclave of Cyberjaya as one of best places to live.


“Cyberjaya offers selected developments there are beautiful in concept and way of life such as the Symphony Hills development,” said Ai Cheng, who is S.K. Brothers Realty Sdn Bhd general manager.


Nevertheless, she agreed that the top places to live and to own property would still be KLCC, Bukit Tunku/Taman Duta, Ampang Hilir / U Thant, Damansara Heights, Bangsar and Mont’ Kiara. But not every part of such areas, offer the best in terms of the “quality” of living.
Situated 50km south of Kuala Lumpur, Cyberjaya spans an area of about 2,833 hectares (7,000 acres) and the development site was primarily undeveloped land and oil palm plantations. Located in the district of Sepang, Selangor, the township of Cyberjaya was launched in 1997 by then Prime Minister Tun Dr Mahathir Mohamad. It forms a key part of the Multimedia Super Corridor (MSC) plan and it was touted as the new Silicon Valley of Malaysia.

Since the launch of Cyberjaya, there has been extensive building activities including a boutique hotel, commercial buildings and offices for MSC-status companies. There are also universities, a community club and the headquarters for the local authority. Award-winning developers like UEM Land and SP Setia have cutting-edge projects there.

Ai Cheng literally grew up learning everything about real estate from her father, Charlie Chan, the founder of S.K. Brothers Realty and a distinguished veteran in the property industry.

Prime areas
While Cyberjaya as a top residential enclave is still a work in progress for many, there is no doubting that wealthy property buyers looking for a prestigious address to purchase an upmarket home, would still look at the established neighbourhoods mentioned.

“The prestigious locations cited are only the broad areas but within them are niches of better places to live,” said Ai Cheng, a graduate of the University of Auckland, majoring in property valuation, investment and development. She attained the prestigious title of Certified Residential Specialist in 2010 from the US National Association of Realtors (NAR).

“The wealthy will come with them a wealth of experience in buying properties that best suit their needs and wants. For which area to live, it would be based entirely on their preference. And we, as estate agents will source for properties based on their requirement and negotiate the transaction. However for investment properties, we can advise them based on the investment returns and recommend the options.”

In considering an ideal residential area, the following criteria should be on the wish list when narrowing down the property choices:

- Road system, basically, the ease of getting in and out of the area and avoiding traffic congestion
- Security issues
- Neighbourhood amenities, i.e. parks, playground, open space, proximity to shops, shopping centres, schools, etc.
- Composition mix, i.e. preference for similar property type clusters (eg. bungalow precincts and semi-detached property precincts)
- Development concept and landscaping (of growing importance in Malaysia)
- Capital appreciation potential
Cyberjaya, Malaysia's premier cybercity and National ICT Hub.

Over-priced
Are properties in areas like Bukit Tunku/Taman Duta, Ampang Hilir/U Thant, Damansara Heights or Bangsar, over-priced?

Said Ai Cheng: “If property buyers already own property in those areas and plan to upgrade within the same area, then it is not too expensive. The important thing about property buying - is to get into it - so that as other properties increase in value so will yours and thus, enabling you to buy in.”

Apparently, there is still a strong demand for properties in neighbourhoods with an established reputation for prestige and exclusivity, especially for investment.

‘Bite-size’ properties
While less “exclusive” areas like KLCC and Mont’ Kiara - due to its high density - may still appeal to those who want to live in trendy neighbourhoods with plenty of dining and entertainment outlets and which offer shopping convenience. For such residents, contemporary living is about having a good time, enjoying fine dining and buying chic accessories. And in order to better sell residential units in such areas, they are built smaller for obvious reasons.

“Areas close to the Kuala Lumpur city centre and within the centre, such as Mont’ Kiara, are being developed at a rapid pace. And most projects are of high density in nature, with quite a number of residential units, being small such as studio units,” pointed out Ai Cheng, who has been in the real estate industry since 1999.

“Some term it as ‘bite-size’ properties. Virtually all projects in Mont’ Kiara are high-rise in nature.”
While some wealthy property buyers want a prestigious home that makes a statement there are equally rich home buyers who do not wish to draw any attention to themselves. But all who wish to live in the best places that money can buy, inevitably want security yet money can’t guarantee peace of mind.

TA Global paying RM257.6mil for 4-star Movenpick Karon in Phuket

PETALING JAYA: TA Global Bhd is buying the hotel and business of Movenpick Karon Beach Resort in Phuket, Thailand for US$90.2mil (RM275.6mil) cash.

The property development and investment group told Bursa Malaysia that its wholly-owned subsidiary, Crystal Caliber Sdn Bhd, had entered into a sale and purchase agreement on Wednesday with Kingdom Hotel Investments regarding the Thai hotel.

The four-star hotel has 175 guestrooms, 163 suites and villas and 30 beachfront two-bedroom apartments which are on a 82,828 sq m freehold site.

TA Global also said the hotel had facilities including eight food and beverage outlets, four swimming pools, a spa with seven therapy rooms, a fitness centre, business centre, kids club and in excess of 1,350 sq m of meeting and banqueting space.

The hotel is located about 15km from Phuket town, and is also within a 10-minute drive from Kata Beach and the Patong Beach district.

TA Global will fund the purchase from internally generated funds and external borrowings.

TA Global said the purchase price took into consideration comparable market evidence of earnings multiples.

No valuation has been conducted on the hotel.

Kingdom Hotel Investments had invested US$69.8mil (RM213.4mil) in the hotel in April 2006.

Based on unaudited financial statements as at Feb 29, 2012, the hotel has net assets of US$67.6mil (RM206.6mil) and an occupancy rate of 93%.

TA Global, which owns two hotels in Australia and one each in Canada, Singapore and China, said the Thai hotel deal would enhance the group's hospitality operations in major cities worldwide.

“This will provide steady revenue stream and enhance the revenue contribution from the hospitality division to the group,” it added.

It was also pointed out that Phuket enjoyed a high volume of international visitors and remained one of the most visited destinations in Thailand.

The Phuket International Airport is expanding and by 2014, it will have an annual capacity of 12.5 million passengers which is almost twice its current capacity level of 6.5 million.

The proposed purchase is expected to increase TA Global's gearing ratio from 0.32 times as at Jan 31, 2011 to 0.42 times.

The deal was expected to be completed by the second quarter of the financial year ending Jan 31, 2013, the group said.

By The Star

Thursday 26 April 2012

RM3B Aeropod project takes off after 3-year study


Posted on : 26-02-2012 | By : Sabah Today | In : News

February 26, 2012
Kota Kinabalu: A RM3 billion mixed commercial development that will see the Tanjung Aru Railway Station getting a major facelift has begun with the launch of the Aeropod by internationally-renowned Malaysian developer, SP Setia Berhad, Saturday.

The ambitious project would be done in five phases and includes retail offices, three hotels (including a 5-star hotel). They are expected to be completed between eight and 10 years from now.
Preparation of the infrastructures as well as construction of the State Railway Department headquarters at the present station would be done under Phase One.
Costing more than RM200 million, the first phase is expected to be completed in three years.
The launching ceremony was a culmination of more than three years of studies conducted by SP Setia to know Sabah and bring their worldwide knowledge in terms of property development into the State.
Officiating at the event, Chief Minister Datuk Seri Musa Aman said the State Government welcomed such initiative as Sabah aimed to continue positioning itself as a main gateway for investments from within the region, including through the region of Brunei Darussalam, Indonesia, Malaysia, Philippines-East Asean Growth Area (BIMP-EAGA).
He said in tandem with the aim, the real estate market has also become stronger in recent years with increased investor interest and overall confidence in Sabah’s economic growth.
“We are seeing an upward trend in real estate value not only in Kota Kinabalu, but also in other major towns like Sandakan, Tawau and Lahad Datu,” he said.
Musa who is also State Finance Minister said the redevelopment and modernisation of the railway station, which is situated within SP Setia’s Aeropod, is especially important as the State enters the second phase of the Sabah Development Corridor (SDC).
He said the Aeropod’s proximity to the Kota Kinabalu International Airport and integration with the Tanjung Aru railway station will allow it to benefit from the projected growth in tourist arrivals to Sabah.
“The development of tourism calls for a number of initiatives, including improvement of our transport systems, such as the redevelopment and modernisation of the Tanjung Aru Railway Station.
“This is one of a number of efforts that will provide an impetus to Sabah to attract a greater number of visitors, helping the SDC achieve part of its goals.
“The second phase will run until 2015 and will see the SDC pursuing an ambitious list of development projects to generate employment and income for Malaysians in Sabah, and to help jump-start sustainable economic growth,” he added.
Musa said that the cumulative planned investment that has reached RM63 billion, almost four times the target value set in 2010 now that the SDC is entering its second phase of growth.
He also said that the railway line from Tanjung Aru to Tenom has been around since the early 1900s and is steeped in history as a transportation link built by the British to transport produce from the inland to the coast for export.
On another note, he said developers need to keep a pulse on the needs of potential homeowners who are looking for affordable properties with lifestyle concepts.
“I urge developers to continue pursuing innovation and creativity, incorporating designs and proposing material as well as structures that will require less use of energy.
“There is enough knowledge and technology for developers to tap from in offering greener buildings and with that reducing negative impacts on the environment and natural resources.
“Sabah is known as a biodiversity hub, and efforts to integrate environmental consciousness in our buildings will go a long way in protecting our natural resources,” he said.
Meanwhile, S P Setia Berhad President and Chief Executive Officer, Tan Sri Liew Kee Sin, assured that the project would not disrupt the railway services for the people.
The railway workers’ quarters at the 60-acre project site would be relocated to Kinarut to pave the way for the project, he said when met after the launching ceremony.
Liew said the first phase involving 20 acres would see infrastructure development as well as the construction of the Railway Department headquarters.
There would also be a Galleria, a museum on the North Borneo Train service, an aquarium at the drop-off point, which is set to be the centre of Aeropod.
In the later stages of the project, about 5,000 units of apartment have also been planned, he said. Liew said the Group took about three years to study and understand what they can do in Sabah.
“There are a lot of good developers in Kota Kinabalu so when we come here we need to make sure that we do something different,” he said, adding that it was easy to put everything of the project into a conceptual 3D video format but to turn it into reality is another thing.
According to him, SP Setia is the only Malaysian property developer that won three awards from the International Real Estate Federation (FIABCI) and had projects in other countries such as Vietnam, Singapore, Australia and perhaps United Kingdom,
“You tell people this and they say so what? We must show it to them.
Seeing is believing,” he said, adding that about 120 staff from its various overseas offices were specially flown in for the ceremony in order to give them first hand information and hopefully “sell Sabah” once they returned.
For Liew, Aeropod would give SP Setia the opportunity to showcase what it had learned from all over the world.
Aeropod is modelled after SP Setia’s successful SetiaWalk development in Puchong and conceptualised along the Group’s development philosophy of “LiveLearnWorkPlay”.
Also on hand were Deputy Chief Ministers, Tan Sri Joseph Pairin Kitingan and Datuk Dr Yee Moh Chai, Industrial Development Minister, Datuk Raymond Tan, Setia Foundation Chairman, Tan Sri Lee Lam Thye and SP Setia top officials as well as State Government senior officials.
(Source: Daily Epress)